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【华泰证券】福成股份:5亿元收购浙江钱江陵园60%股权

[Huatai Securities] Fucheng Co., Ltd. buys 60% of Zhejiang Qianjiang Cemetery for 500 million yuan

華泰證券 ·  Nov 15, 2016 00:00  · Researches

500 million yuan to buy 60% stake in Zhejiang Qianjiang Mausoleum

Fucheng shares issued an announcement on November 14th The company received the agreement on capital increase and equity transfer of Hangzhou Qianjiang Mausoleum Co., Ltd. on November 11 with Zhou Xiaoming, Zhou Baiqing and Ruijue Investment Partnership (Limited Partnership) of Ningbo Meishan bonded Port area Ruijue Investment Partnership Co., Ltd. on the equity transfer agreement of Hangzhou Qianjiang Mausoleum Co., Ltd. Fucheng Hehui Fund increased capital to Qianjiang Mausoleum and transferred part of the equity of the original shareholders to a total of 500 million yuan, of which 290 million yuan was transferred to 48% of Qianjiang Mausoleum held by Ruijue Investment Partnership (Limited Partnership) in Ningbo Meishan Free Trade Port area. and an increase of 210 million yuan to Qianjiang Mausoleum to obtain an additional 9 million yuan of registered capital, and finally hold a 60% stake in Qianjiang Mausoleum.

Qianjiang Mausoleum is located in Xihu District, Hangzhou. It has 90, 000 tombs for sale, with an average 16H1 price of 85400 yuan.

Qianjiang Mausoleum, located in Zhoufu Village, Shuangpu Town, Xihu District, Hangzhou City, is a private operating cemetery approved by the Department of Civil Affairs of Zhejiang Province and Hangzhou Civil Affairs Bureau. Qianjiang Mausoleum is conveniently located and can be reached directly along Hangfu Highway, which is only about 15 kilometers away from the West Lake tourist Scenic spot. The total planned area of the graveyard is about 350mu, of which the developed land area is 60 mu, and the remaining 11000 tombs are for sale; the land area available for future development is 290mu, and there are 79000 planned graveyards, with a total of about 90,000 available for sale. In the first half of 2016, the average selling price of tomb space per unit in Qianjiang Mausoleum is about 85400 yuan, and it is also a mausoleum designated by veteran cadres in Hangzhou.

Reiterate that cemetery service has the industry attribute of both optional consumption and public utilities, and Fucheng integration is accelerated.

The cemetery service industry has the dual industry attributes of optional consumption and public utilities at the same time. From the perspective of optional consumption, consumers are less sensitive to the price of cemetery services and are willing to pay a high premium for the marginal improvement of products (the products and services of operational cemeteries are significantly better than those of public welfare cemeteries), which is the basis of strong profitability of the industry. From the perspective of public utilities, operating cemeteries have the characteristics of natural regional monopoly. in view of the supply-side control of civil affairs departments in the field of operational cemeteries, the deterioration of the competition pattern in the industry due to the emergence of a large number of new entrants is a small probability event. The acquisition of a 60% stake in Qianjiang Mausoleum is Fucheng's second purchase of a 60% stake in Jiangsu Yixing in September. As a leader in the industry, Fucheng's integration of the cemetery service industry has begun to accelerate.

The only A-share graveyard service provider benefiting from the population cycle maintains a "buy" rating.

Fucheng's acquisition of Longyi Cemetery and Qianjiang Mausoleum within two months confirms our previous judgment on the company's extension expansion model and the positioning of industry integrators. at the same time, both projects are located in the traditional strong region of competitors, the Yangtze River Delta region, which also proves Fucheng's unique advantages in extension expansion. Considering that the two projects are still in the M & A fund and have not led to a change in the merger scope of listed companies, we maintain our previous profit forecast that the operating income from 2016 to 2018 will reach 1.438 billion yuan, 1.641 billion yuan and 1.793 billion yuan, and EPS will reach 0.25,0.28 yuan and 0.32 yuan. By using the method of segment valuation, Fucheng shares are given a 6-month target market capitalization range of 145-15.5 billion yuan, corresponding to a target price range of 17.70-18.93 yuan, maintaining a "buy" rating.

Risk hint: the direction of marketization of cemetery service industry has been reversed; food safety issues.

The translation is provided by third-party software.


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